An economist discusses ‘all this bulls*** of 20 years of austerity’… May 31, 2012

There’s a small anecdote from the SBP on a pro-Treaty meeting addressed by Lucinda Creighton and others.

Economist Colm McCarthy dismissed the arguments of the No campaigners. There was a loud laugh from the audience as McCarthy recalled driving down the country last week and noticing that some “geezer” had a poster up saying “Vote No to Water Charges”.
“All this bulls*** of 20 years of austerity is not true,” the economist explained, “austerity means you are cutting the budget deficit. Once it is cut enough, you don’t need to cut anymore.”

That sounds logical on the face of it. But it’s not entirely accurate. McCarthy must be aware that ideological and political approaches exist, indeed he’s championed them on occasion, which seek a significantly smaller state. And he must also know that the dynamic of a decade of cuts, which is near enough what we’re looking at at best, will have its own momentum. And he must also know too that commentators who eschew the baroque and hyperbolic, such as Michael Taft, have strong analyses which suggest that extended periods of ‘austerity’ are indeed in the offing due to the overall economic context.

Once is never enough.

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I saw Colm McCarthy speak at some economics forum early this year/ late last year and, in the course of explaining why we don’t really need any major infrastructure projects -railways, metro, hospitals – because we’ve caught up, now that we have a motorway system, he remarked that, the week before, he had made it from the Red Cow to Dunkettle in two and a quarter hours: it struck me then who he really is – he’s Ireland’s Jeremy Clarkson. A bit smarter, not as tall and with glasses, but otherwise he fulfills the same function; to reassure our native Tories that all their prejudices about the public service, lefties, the unemployed and so on are ‘just commonsense’.

I read Tom Garvin’s goddawful ‘Preventing the Future’ recently and a persistent theme was that the ‘d’unions’ held back the development of roads during the 50’s and 60’s because the working classes of the time didn’t have cars. So, I suppose, for McCarthy, Garvin and that phalanx of right-wing UCD academics who we’ve heard more from than we every really needed to hear, the motorway network is the pinnacle of Irish development and a symbol of their triumph over the ‘lower orders’.

in the course of explaining why we don’t really need any major infrastructure projects -railways, metro, hospitals – because we’ve caught up, now that we have a motorway system

I’ve seen him warm to that theme in the Farmer’s Journal, transplant it to Irish Economy and get soundly spanked by all in the comments, and then promptly rehash the same article again in the Journal. Which says it all about how much serious attention should really be paid to him.

RTÉ is disingenuous in how it allows the likes of him and others to pose as independent, objective outsiders (the appalling PD hagiography springs to mind).

A public works stimulus across Europe is a win win. A second Channel Tunnel, a renewed electricity grid 9needed if wind power is to really expand and we need a few more interconnectors), extension of TGV, bridges in quite a few places a metro in Dublin. All of which will benefit the main EU powers. They have the heavy engineering.
The 30s recession really ended with WW2. An emergency programme like above but extended would do. It has to be pan EU.

‘So the austerity drive in Britain isn’t really about debt and deficits at all; it’s about using deficit panic as an excuse to dismantle social programs. And this is, of course, exactly the same thing that has been happening in America….For economic recovery was never the point; the drive for austerity was about using the crisis, not solving it. And it still is.-Krugmanhttp://www.nytimes.com/2012/06/01/opinion/krugman-the-austerity-agenda.html